You organized a closet, folding wool sweaters into open bins. You didn’t notice a small moth infestation in the corner. Three months later, the client opens the bins to find $20,000 of cashmere eaten alive. They claim you were negligent for not sealing them and for “spreading” the infestation by moving the clothes.
Key Takeaways
- Completed Operations: The damage happened after you left. You need “Products and Completed Operations” coverage. If your policy only covers “Premises/Operations” (while you are there), this claim is denied.
- The “Vermin” Exclusion: Many policies exclude damage caused by insects, vermin, or animals.
- Professional Negligence (E&O): The client is arguing you failed in your professional duty to know better (i.e., putting wool in open bins). This is an E&O claim, not just property damage.
- Expert Testimony: You need an entomologist to prove the moths were there before you arrived.
The “Why” (The Trap): Negligence vs. Nature
If a pipe bursts, that’s sudden. Moths are gradual.
General Liability often excludes “gradual damage” and “insects.”
However, Professional Liability (E&O) covers your advice and method. If you advised “open bins for wool” and that advice caused the loss, E&O is your best hope. If you don’t have E&O, you are likely paying for the sweaters.
The Investigation: The Moth Defense
I spoke to a restoration dry cleaner about liability.
1. Who is at fault?
- My Analysis: Moths reproduce in 6-8 weeks. If damage appears 3 months later, they could have entered after you left.
- Defense: “I left the closet moth-free. The infestation is a new occurrence.”
2. Insurance Carrier (Hiscox E&O)
- My Analysis: E&O would defend you against the claim of “Bad Organizing Advice.”
- Cost: Legal defense costs are covered, even if the infestation itself is excluded by GL.
Comparison Table: Moth Damage
| Policy | Covers the Sweaters? | Covers Your Legal Defense? |
| General Liability | Unlikely (Insect Exclusion) | Maybe |
| Professional Liability | Yes (Negligent Advice) | Yes |
| Client’s Homeowners | No (Standard exclusion) | N/A |
Step-by-Step Action Plan
- Deny Liability (Politely): “I follow industry standards. Moths can enter at any time.”
- Consult an Expert: Get a quote from a restoration cleaner. Often, freezing/cleaning saves the clothes for $500, avoiding the $20,000 replacement claim.
- Notify E&O Carrier: Open a “potential claim” file.
- Update Protocols: Use sealed bins for wool/cashmere. It’s the only fail-safe.
FAQ Section
Did I ‘bring’ the moths?
Unlikely, unless you brought used bins from another house. Never re-use cardboard boxes between clients.
Can I offer to pay for dry cleaning?
Yes, as a “Customer Satisfaction” gesture, but have them sign a release saying this satisfies all claims.
Is moth damage covered by their home insurance?
Almost never. It is considered a maintenance issue.